Sell Your Income Property For More

Selling income property isn't like selling a house. You can paint a house, and get a little more because it looks nice. Rental property is different, because it's bought by investors, who look at income more than new paint. Raise income, and you increase value.

Let's assume investors in your area expect a capitalization rate of .08. That means that they want a net return (before loan payments and taxes) of 8% on the purchase price. If your three-plex generates $12,000 net income annually, they'll value it around $150,000 ($12,000 divided by .08). Make it generate $16,000, and you make it worth $200,000.

Get More Income From Your Income Property

Higher rents is the obvious way to boost income, if you can justify it. Find out what similar units are renting for. If you're $60 below the going rate, you can raise rents and not lose your renters. Raising the rent $60 for three apartments means $2160 more net income annually. At a .08 cap rate, you just added $27,000 to the value of your property.

Consider other ways to raise rents. Your tenants may agree to $30 more per month if you have a carport built. That's $1080 more net income annually, meaning roughly $13,500 more value added to your property. ($30 x 3 units x 12 months = $1080 divided by a .08 cap rate = $13,500) Build that carport for $4,000, and that's a good return on investment right? What else do they want?

Consider other ways to get more income. Rent storage sheds to tenants or put in a coin-operated washer and dryer. If you own a larger income property, you could install pop machines.

Reduce Rental Property Expenses

Can you add insulation to reduce the heating costs? If you're paying $80/month for lawn care, will one of the tenants do it for $40? Can you get cheaper insurance? Look for any ways you can reduce expenses. A new $4,000 furnace that saves $800/year on heating costs means you just turned $4,000 into a $10,000 higher sales price.

These things are never an exact science, and of course appearance and other factors matter. Increasing that net, though, is the surest way to get more for your income property. Just make the changes at least several months before you try to sell the property. Also, learn how do the math - it really does matter.

Steve Gillman has invested real estate for years. To learn more, and to see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com

More than 40 states signed onto a proposed $25-billion deal with major mortgage servicers over faulty foreclosure practices. New York, Nevada and Delaware joined California in holding out for better terms.

More than 40 states signed onto a proposed $25-billion settlement with major mortgage servicers over faulty foreclosure procedures, but California, New York and other key states were still not among them.

California has until Monday to share in a multi-state deal with banks to obtain mortgage relief and reforms. Atty. Gen. Kamala Harris, who walked away from talks last year, says the door remains open.

With a Monday deadline at hand, California officials have resumed direct talks with the Obama administration about joining a multibillion-dollar, multi-state mortgage settlement with the nation's largest banks, a source said Sunday.

The talk show host pays $12 million for the 4,088-square-foot house with four bedrooms and four bathrooms. The ocean-view home sits on 1.26 bluff-top acres with beach access.

In one of the more talked-about transactions in town, actors Brad Pitt and Angelina Jolie have sold their Malibu beach house to daytime host and comedian Ellen De Generes for $12 million.

The four-bedroom, five-bathroom house built in 1920 for industrialist James Wigmore lists for $2,875,000.

A decorative cast stone entrance opens to this restored Spanish Colonial Revival-style house in Pasadena's South Orange Grove area. Built in 1920 for industrialist James Wigmore, the house retains such original details as coffered wood ceilings and arched doorways.

They don't believe they can sell their property for what it's worth, so they're spending money on making their homes more comfortable.

Do you fit any of these descriptions?

A biennial research report by the National Assn. of Realtors indicates that a handful of real estate agents and brokers and their clients either don't know the law or don't care to follow it.

When it comes to lawsuits, real estate agents and brokers tangle mostly among themselves.

The president aims to help about 3.5 million people with good credit who are unable to refinance at historically low rates because their homes are worth less than their mortgages.

 

The White House hopes to help millions of homeowners lower their monthly mortgage bill with a $5 billion to $10 billion plan to set up a streamlined refinancing program for people who are current on their payments.

The Standard & Poor's/Case-Shiller index of 20 large U.S. cities fell 1.3% in November from October as foreclosures continue to drag down the housing market.

Three straight months of home-price declines in the biggest U.S. cities showed that foreclosures remain a significant drag on a housing market that is entering its fifth year of deterioration.

L.A. Clipper Chris Paul may be quick down the court, but he moves pretty fast when it comes to buying multimillion-dollar real estate too.